[turtle4]

He's saying in an absolute meritocracy, things are only awarded by merit. Given the choice between awarding a contract to company A or company B, once A has already shown to have more merit than B, all future work would logically go to A, and B would die out.

Presuming that A doesn't do something to demonstrate they don't deserve merit any longer, why would you ever go with a proven inferior (B) option, or an option that is unproven altogether (C)? Hence, a trend toward a single dominating entity.

In reality, I think things are more nuanced, of course. No one awards purely on merit, as you also have timing, capacity, and costs to balance. I'm not really aware of any market that you could consider a -true- meritocracy to the extent of the GP comment. And maybe I misread the comment altogether, but that is my understanding.

[Jare]

You read it correctly, thanks a lot of clarifying my terse comment. Naturally, no market is going to behave perfectly like this, but I think it's important to understand where the natural tendency points to, and what kind of elements will alleviate, smooth or otherwise disrupt the absolute winner-takes-all nature. If you are going to say deliver a new product, you need to understand that unless your product has something superior to the competition or you can subvert the meritocratic dynamics (say, through marketing & PR), it will likely die because there's no reason NOT to choose a competitor.

[yummyfajitas]

A single dominating entity in a given niche. Why do you assume consumer preferences are homogeneous?